Breakeven year
Year 4
Net worth diff. at yr 15
+$1k
Buy net worth at horizon
$489k
Rent net worth at horizon
$488k
Year-0 buy monthly cost
$3,403
Year-0 rent
$2,200
Total tax savings thru yr 15
$65k
Net worth over time
Monthly cost of owning vs. renting
Tax savings assumptions
Mortgage interest and property tax (capped by SALT) are itemizable deductions — but they only reduce your taxes if, combined, they beat what you'd get from the standard deduction anyway. Each year below is checked independently, using single 2025 federal brackets, since interest paid and property tax both change every year.
Standard deduction (single)
$15,000
Itemizing only helps in years your mortgage interest + min(property tax + est. state tax, $10,000 SALT cap) exceeds this.
Federal brackets used (single)
| $0–$11,925 | 10% |
| $11,925–$48,475 | 12% |
| $48,475–$103,350 | 22% |
| $103,350–$197,300 | 24% |
| $197,300–$250,525 | 32% |
| $250,525–$626,350 | 35% |
| $626,350+ | 37% |
Year-by-year: home equity vs. rental portfolio
| Year | Home value | Mortgage bal. | Home equity | Buy net worth | Rent portfolio | Itemized ded. | Std. ded. | Tax savings |
|---|---|---|---|---|---|---|---|---|
| 0 | $500k | $400k | $100k | $100k | $115k | $10k | $15k | — |
| 1 | $518k | $396k | $122k | $122k | $132k | $36k | $15k | $5,008 |
| 2 | $536k | $391k | $145k | $145k | $150k | $36k | $15k | $4,937 |
| 3 | $554k | $386k | $169k | $169k | $169k | $35k | $15k | $4,860 |
| 4 | $574k | $380k | $194k | $194k | $188k | $35k | $15k | $4,778 |
| 5 | $594k | $374k | $219k | $219k | $209k | $35k | $15k | $4,691 |
| 6 | $615k | $368k | $246k | $246k | $231k | $34k | $15k | $4,598 |
| 7 | $636k | $362k | $274k | $274k | $254k | $34k | $15k | $4,498 |
| 8 | $658k | $355k | $304k | $304k | $278k | $33k | $15k | $4,392 |
| 9 | $681k | $347k | $334k | $334k | $303k | $33k | $15k | $4,279 |
| 10 | $705k | $339k | $366k | $366k | $330k | $32k | $15k | $4,158 |
| 11 | $730k | $331k | $399k | $399k | $358k | $32k | $15k | $4,030 |
| 12 | $756k | $321k | $434k | $434k | $388k | $31k | $15k | $3,892 |
| 13 | $782k | $312k | $470k | $470k | $419k | $31k | $15k | $3,746 |
| 14 | $809k | $301k | $508k | $508k | $453k | $30k | $15k | $3,589 |
| 15 | $838k | $290k | $547k | $489k | $488k | $29k | $15k | $3,422 |
Shaded rows are years itemizing actually beat the standard deduction (itemized ded. > std. ded.) — only those years show a nonzero tax savings. "Buy net worth" is home equity minus estimated selling costs, charged only in the final year.